One of the biggest downfalls for many small businesses is failed cash flow and one of the biggest culprits for failed cash flow is unpaid invoices. But there is a solution. By taking a few steps you can up your chances of getting paid. Let’s look at eight steps to getting paid.
1. Get the correct information
Ensure that you have all the information that your customer needs on an invoice for it to be paid. If there needs to be a purchase number, ensure you have it on the invoice. By having an invoice with all the correct data on it, you increase your chances of being paid on time.
2. Know your customers
\Before you do business with your customer, it is important to do a credit check on them. With this information, you can assess whether you want to go into business with the customer, and how you will invoice them. You may ask them for a deposit before you start. You should also get to know the person responsible for the accounts so that you can understand the process of getting an invoice paid and ensure you adhere to it so you can get a prompt payment.
3. State your payment terms
is important to discuss payment terms with your customer when you discuss the contract. This will ensure that they are aware of payment periods, late payment penalties, and which payment methods you accept. If you work with companies in different regions, you will need to state what currency you are charging them in.
4. Send out invoices promptly
Ensure that you send out an invoice as soon as you have done the job or delivered the goods. Your customer will then not have to think too hard about what you are charging them for and if they have any complaints, it will be fresh in both your minds. This will enable you to clear up any misunderstandings and get the payment paid quickly.
5. Follow up on the invoice
Most times when someone has not paid you it is because the invoice has been forgotten. You should send a friendly reminder email to tell them that the invoice is due. This normally prompts them to pay.
6. Make the call
If payment still hasn’t been made, then you should give them a call to find out why. You only need to state why you are calling them and leave them to explain why they still haven’t paid. By calling them, you can sort out any problems that there may be and set a time when you can expect a payment.
7. Send another email
If you still don’t receive payment, then you can send another email and remind the customer of what the next steps will be. This can be an email with the invoice and a statement of the invoices and payments you have received to date. You may need to repeat steps six and seven once or twice before moving on to step 8.
8. Contact a debt collector
\If you have had no replies to your phone calls or emails, it may be time to contact the professionals. You can hand over the invoice to a debt collector who will get the payment and take a portion for their services.
By following these eight steps you will be well on your way to getting paid. Remember cash flow is important for you to be in business.
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